- MARA secured $950M in 0% convertible notes to buy more Bitcoin and expand operations while reducing debt and boosting growth plans.
- The firm repurchased 2026 notes and used capped calls to protect shareholders from dilution while locking a 40% premium per share.
- MARA can redeem notes in 2030 if stock rises 130% over conversion price, which could drive heavy trading and price swings.
MARA Holdings, Inc. has closed a massive $950 million upsized offering of 0.00% convertible senior notes due 2032. The company revealed that it will use the majority of the proceeds to acquire additional Bitcoin and support corporate growth plans.
After deducting commissions, MARA netted approximately $940.5 million from the sale. Besides strategic acquisitions, the firm plans to use the funds for working capital, debt repayment, and general business expansion.
Repurchase of 2026 Notes and Capped Call Strategy
Additionally, MARA spent $18.3 million to repurchase $19.4 million in aggregate principal of its 1.00% convertible notes due 2026. The firm also allocated $36.9 million to execute capped call transactions with initial purchasers and financial institutions.
Consequently, these capped calls will limit potential dilution and offset cash obligations in excess of principal on converted notes. Notably, the capped call price was set at $24.14 per share, reflecting a 40% premium over MARA’s July 23 share price.
MARA structured the notes as senior unsecured obligations that mature on August 1, 2032. Holders may convert them into cash, stock, or both, depending on MARA’s decision. Moreover, the notes carry an initial conversion rate of 49.3619 shares per $1,000 principal, equivalent to a $20.26 conversion price.
Potential Market Implications and Redemption Conditions
If the company’s stock trades at least 130% of the conversion price, it will be able to redeem the notes starting on January 15, 2030. Under specific circumstances, holders may demand that MARA repurchase notes on January 4, 2030. When certain provisions are activated, this flexibility may generate trading volume.
Additionally, holders of the 2026 notes that were hedged might purchase MARA stock to unwind their hedge holdings. The share price may be influenced by this action, which could either raise it or offset any drops.
MARA emphasized that most of the capital will target additional Bitcoin purchases, boosting its position as a leading digital asset infrastructure company. Hence, the successful note offering and structured hedging strategy position MARA to expand its crypto holdings while maintaining shareholder protection against dilution.
